2012 Annual Report
`
`Exhibit 1076
`IPR2017-00807
`ARGENTUM
`
`000001
`
`

`

`Shareholder information
`
`2013 INTERIM FINANCIAL REPORTS
`Interim report January–March
`Interim report January–June
`
`Interim report January–September
`
`May 7
`August 2
`November 8
`
`ANNUAL GENERAL MEETING
`Location: Medas’s facilities, Pipers väg 2A, Solna, Sweden
`Time: 5 PM on Tuesday, May 7, 2013.
`
`ShAREhOLdERS whO wISh TO PARTICIPATE IN ThE
`MEETING MUST:
`
`• Be registered in the Euroclear Sweden AB share
`database by April 30, 2013.
`• Notify the company by April 30, 2013.
`Shareholders may register by postal mail (Meda AB
`AGM, Box 7835, SE-103 98, Stockholm, Sweden),
`by phone (+46 8-402 90 49), or via the website at
`www.meda.se.
`
`REGISTRATION
`Notice of attendance must be received no later than
`April 30, 2013. Registrations shall include name, civil
`registration or corporate ID number, address, phone
`number, and number of shares held.
`Shareholders represented by proxy must send a power of
`attorney for the proxy. If the power of attorney is issued
`by a legal entity, a notarized copy of the corporate re-
`gistration certificate must also be included. The power of
`attorney and registration certificate must not be issued
`more than one year prior to the AGM.
`
`ShARE REGISTRATION
`To participate in the AGM, any shareholders whose
`shares are nominee-registered must temporarily register
`their shares with Euroclear Sweden AB. The entry must
`be effected by April 30, 2013.
`Address changes should be registered with the appro-
`priate financial institution as soon as possible.
`
`
`
`Addresses
`
`hEAdqUARTERS:
`
`Meda AB
`Box 906 , SE-170 09 Solna, Sweden
`Visitors: Pipers väg 2A
`Phone: +46 8 630 19 00
`Fax: +46 8 630 19 50
`E-mail: info@meda.se
`www.meda.se
`
`Contact information for subsidiaries is available at: www.meda.se
`
`MEdIA ANd INvESTOR RELATIONS:
`
`Tel: +46 8 630 19 00
`E-mail: IR@meda.se
`
`000002
`
`

`

`Contents | 2012 Annual report
`
`Contents
`
`1 Contents
`2 CEO’s report
`4 Milestones
`4 2012 in figures
`5 Trends and specialty pharma
`12 Strategy and business development
`14 Meda in brief
`18 Sales and marketing
`21 Product portfolio
`37 Drug development
`40 Manufacture and product supply
`41 Meda’s Sustainability Report 2012
`56 Management report
`62 Corporate governance report
`
`69 Consolidated accounts
`73 Consolidated notes
`103 Parent company accounts
`108 Parent company notes
`118 Proposed allocation of profits
`119 Audit report
`120 Financial review
`122 Risk factors
`125 The Meda share
`128 Board of directors
`130 Senior executives
`132 Definitions
`133 Glossary
`
`1
`
`000003
`
`

`

`MEDA | CEO’s report
`
`Anders Lönner at Ernst & Young’s ”Entrepreneur of The
`Year” competition in Monte Carlo 2012.
`
`2
`
`CEO’s report
`
`The 2012 fiscal year can be summarized as a
`year when Meda fully concentrated on conti-
`nued growth within the boundaries of its busi-
`ness plan. We took carefully planned initiatives
`in new products and made investments into pri-
`oritized growth markets, and combined these
`with acquisitions of interesting product oppor-
`tunities.
`The Dymista launch began in the US in the
`second half of 2012. We have received very
`positive feedback so far, from prescribers and
`patients alike. It is still too early to draw any
`definite conclusions, but I am convinced that
`Dymista presents a unique opportunity for the
`company. Dymista also received approval in Eu-
`rope and we expect to begin launch efforts in
`specific large European markets during the se-
`cond quarter of 2013.
`In 2012, we also significantly expanded
`Meda’s portfolio with additional interesting pro-
`duct launches. A handful of products received
`new product approvals in Europe, such as Zycla-
`ra, Astepro, Acnex, and Edluar. In addition, we
`finalized several product acquisitions in the US.
`
`000004
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`

`

`CEO’s report | 2012 Annual report
`
`Meanwhile, we continue to use the company’s
`global product potential in the OTC area to the
`best of its advantage, either alone or through
`partnerships with other pharmaceutical compa-
`nies. Prescription-free pharmaceuticals display
`healthy growth figures and now comprise about
`25 percent of Meda’s total revenue. Another po-
`sitive effect from this strategic direction is the
`continued decrease of Meda’s dependency on
`subsidized drugs.
`Efforts in prioritized growth markets are also
`continuing in force, which has also led to a sig-
`nificant expansion of Meda’s marketing organi-
`zations.
`The marketing organizations in Meda’s growth
`markets currently employ about 700 people, an
`expansion of 300 employees since the beginning
`of 2012. Meda’s combined sales in all growth
`markets comprise almost 15 percent of the
`company’s total turnover and are displaying ro-
`bust growth. Russia, the Middle East, China and
`Turkey currently make up Meda’s largest growth
`regions.
`
`MOVING FORWARD
`The pharmaceutical industry is faced with ma-
`jor challenges but Meda is part of segments that
`will display growth. In a world that is striving af-
`ter lower pharmaceutical costs on several levels,
`production costs will become more important.
`Meda has a good foundation of internal and ex-
`ternal production, but we will gradually search
`for cost effective solutions in production.
`In addition, we have a strong cash flow and
`will take action to continue our acquisitions of
`interesting products and investments in prioriti-
`zed markets.
`In conclusion, I would like to extend my thanks
`to all employees for their excellent contribution
`during 2012. Now we look ahead to the future,
`to face new exciting challenges.
`
`Anders Lönner
`Group President and CEO
`
`3
`
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`

`

`MEDA | 2012 in figures
`
`Milestones in 2012
`
`• DYMISTA WAS APPROVED BY THE US FOOD AND DRUG ADMINISTRATION (FDA)
`– Unique product for treatment of allergic rhinitis. US pre-launch during the fall.
`
`• ZYCLARA APPROVED IN EUROPE
`– A drug for the treatment of actinic keratosis, a premalignant condition of skin
`cancer.
`
`• STRENGTHENED PRODUCT PORTFOLIO IN US
`– Acquisition of products such as MidNite (treatment for insomnia) and
`Elestrin (treatment of vasomotor symptoms).
`
`•
`
`INTERNATIONAL LAUNCH OF SEVERAL NEW OTC PRODUCTS
`– SB12 has now been introduced on some ten markets outside the Nordic
`countries.
`
`• SIGNIFICANT EXPANSION OF MARKETING ORGANIZATION ON GROWTH MARKETS
`– The marketing organizations in Meda’s growth markets currently employ about
`700 people, an expansion of 300 employees since the beginning of 2012.
`
`2012 in figures
`
`• Group net sales reached SEK 12,991 million
`(12,856).
`
`• Profit after tax increased to SEK 1,180 million
`(1,608).
`
`• Increased investments in the marketing- and
`sales organization.
`
`• Operating profit decreased to SEK 1,791 mil-
`lion (2,644).
`
`• Earnings per share reached SEK 4.00 (5.35).
`
`• EBITDA was SEK 3,935 (4,683), yielding a
`30.3% margin (36.4).
`
`• Proposed dividend per share: SEK 2,25 (2.25).
`
`4
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`

`Trends and specialty pharma | 2012 Annual report
`
`Efforts to develop Meda into a world-leading
`specialty pharma company continue
`
`Meda’s ambition is to become the world’s
`leading specialty pharma company. Meda pur-
`sues this via acquisitions of companies and pro-
`duct rights, long-term partnerships, and en-
`hanced presence in growth markets teamed
`with late-phase development. The company’s
`direction is based on developments in the glo-
`bal pharmaceutical market, as well as the chal-
`lenges faced by public authorities in different
`countries due to increasing pharmaceutical
`costs.
`
`CONTINUEd GROwTh IN PhARMACEUTICAL MARKET
`The driving factors behind growth in the global
`pharmaceutical market are primarily popula-
`tion increases around the world, the gradual
`increase in life expectancy and changes to the
`range of drugs available, with a greater focus
`on lifestyle diseases.
`Demand for medicines for age-related di-
`seases is on the rise, as are costs. The pharma-
`ceutical cost associated with a 60-year-old is
`generally estimated at twice the cost associa-
`ted with a 40-year-old. Successful treatments
`in health care mean that more patients survive
`acute and other serious conditions, which re-
`sults in various chronic or secondary conditions
`requiring drug treatment. Continual drug tre-
`atment to prevent various illnesses and hospi-
`tal stays has high priority from care providers,
`which fuels demand. The combination of in-
`creased use of medications per patient and a
`growing number of new patients accounts for
`an upswing in pharmaceutical market volumes,
`
`with increases in both the number of prescrip-
`tions and the dosages dispensed.
`The focus of research and development into
`new drugs is increasingly focused on lifestyle
`diseases and illnesses that were never befo-
`re subject to medical treatment. The fact that
`more people can afford medications means
`that newly developed drugs are often expensi-
`ve. Since newly developed drugs have reduced
`expenses in other areas, prices are largely justi-
`fied from both a medical and a socio-economic
`perspective.
`However, certain changes to the availability
`of pharmaceutical products may have the op-
`posite effect. Increased prescribing of generic
`drugs, i.e. copies of original, more expensive
`drugs whose patents have expired, and in-
`creased use of OTCs has a cost-lowering effect.
`Prescription products displayed a greater sales
`increase than OTCs between 2001 and 2008.
`The reverse is true of recent years. The availa-
`bility of OTC pharmaceuticals has primarily in-
`creased in therapy areas such as respiratory and
`pain and inflammation, while the range of OTC
`products has gradually expanded to include
`more therapy areas than previously.
`
`CLEAR CHANGE IN PHARMACEUTICAL
`MARKET
`GROwTh MARKETS ACCOUNT FOR GREATEST IN-
`CREASE IN dEMANd
`In 2011, the global pharmaceutical market had
`a total estimated value of more than USD 950
`billion. In terms of value, consumption of phar-
`
`5
`
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`

`

`MEDA | Trends and specialty pharma
`
`ThE GLOBAL PhARMACEUTICAL MARKET, 2011
`
`FORECAST FOR ThE GLOBAL PhARMA-
`CEUTICAL MARKET, 2016
`
`Rest of the world 8%
`
`Canada 2%
`
`Japan 12%
`
`Rest of the world 9%
`
`Canada 2%
`
`Japan 10%
`
`US 34%
`
`US 31%
`
`Rest of
`Europe 7%
`
`EU 5** 17%
`
`Rest of
`Europe 5%
`
`EU 5** 13%
`
`Pharmerging* 20%
`
`Source: IMS Institute for Healthcare Informatics.
`
`Pharmerging* 30%
`
`*)
`
` China, Brazil, Russia, India, Mexico, Turkey, Poland, Venezu-
`ela, Argentina, Indonesia, South Africa, Thailand, Romania,
`Egypt, Ukraine, Pakistan and Vietnam.
`**) France, Germany, Italy, Spain and the UK.
`
`maceuticals remains highest in North America
`and Europe. North America represents about
`34% and Europe around 24%.
`In Europe, the five largest markets are Ger-
`many, France, Italy, the UK, and Spain, which
`together make up approximately 70% of the
`total European market.
`This is not the case for growth. Anticipated
`growth in North America for the years 2012-
`2016 is 1–4% per year, which is a drop from an
`average of just over 3% per year for the period
`2007–2011. The reasons behind the weaker
`development are primarily impending patent
`expirations, rapid growth of generics and conti-
`nued effects from the economic downturn that
`began in 2008. Growth in Europe is anticipated
`to be weaker. Forecasts indicate growth bet-
`ween 0–3% for Europe as a whole, with clear
`variations between submarkets, compared with
`
`average growth of 3.8% a year for the peri-
`od 2007–2011. In southern Europe, negative
`growth is expected in the coming years. The
`reasons are the same as for the US, and that
`the macroeconomic problems that have affec-
`ted Greece, Spain, Italy, and Portugal have led
`to austerity programs within public health care.
`In central and northern Europe, growth for the
`next four years is forecast at between 1 and
`3% a year, depending on the market.
`China is displaying an annual growth rate of
`about 15% and is on its way to becoming the
`third largest market in the world. China, along
`with 16 other countries (Brazil, Russia, India,
`Mexico, Turkey, Poland, Venezuela, Argentina,
`Indonesia, South Africa, Thailand, Romania,
`Egypt, Ukraine, Pakistan, and Vietnam) form a
`group of growth markets (jointly known as the
`pharmerging markets) that will see a considera-
`
`6
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`

`Trends and specialty pharma | 2012 Annual report
`
`ble increase in pharmaceuticals consumption up
`to the year 2016. Forecasts indicate that the 17
`growth markets will increase their proportion of
`the global pharmaceuticals market from 20%
`in 2011, to 30% in 2016.
`
`GLOBAL SALES TRENd, FORECAST FOR GROwTh,
`2006–2016, USd BILLIONS
`
`220–
`250
`
`1,175–
`1,205
`
`298
`
`956
`
`658
`
`1,200
`
`1,050
`
`900
`
`750
`
`600
`
`450
`
`300
`
`150
`
`0
`
`2006
`2007–2011
`2011
`Source: IMS Institute for Healthcare Informatics.
`
`2012–2016
`
`2016
`
`CONTINUEd TRENd TOwARdS CONSOLIdATION ANd
`CONCENTRATION
`The trend towards a higher degree of conso-
`lidation and concentration in the pharmaceu-
`tical industry is continuing. The trend towards
`mergers or acquisitions is propelled by opportu-
`nities for streamlining R&D and achieving eco-
`nomies of scale in production and marketing.
`The major multinational pharmaceutical com-
`panies, big pharma, are intensifying efforts to
`develop new “blockbusters”, i.e. drugs that sell
`for more than USD 1 billion per year. As such,
`big pharma earmark more and more of their
`resources to develop drugs for conditions that
`require life-long treatment, such as obesity, dia-
`
`betes, cancer, and arteriosclerosis.
`One effect of this approach is that big phar-
`ma assign lower priorities to numerous medi-
`cally valuable products. The assessment is that
`forecasted sales figures are too low, or that the
`products are local, with sales in a limited num-
`ber of geographic markets. In some cases, large
`pharmaceutical companies completely abandon
`certain therapeutic areas to focus more on tho-
`se areas where they have opted to pursue long-
`term research.
`Resource limits are forcing small, medium-
`sized, and newly established pharmaceutical
`companies to increasingly concentrate on well-
`defined specialized areas. This has helped seve-
`ral new companies to find a market niche, spe-
`cializing in specific areas such as research and
`development, production, or sales and marke-
`ting. As specialists within clearly defined are-
`as it is common for these companies to offer
`cost-effective outsourcing, meaning that other
`companies will have the option of procuring
`selected services, avoiding the need for big, ex-
`pensive organizations traditionally associated
`with the pharmaceutical sector.
`
`IMPROvEd COST CONTROL IN EUROPE
`Europe has a long history of continuously in-
`creasing costs for publicly funded drugs. Howe-
`ver, the pattern was broken in conjunction with
`the global financial crisis that struck in 2008.
`As a consequence of the macroeconomic pro-
`blems, many countries increased their efforts to
`make cutbacks in the public sectors, and health
`care was one area where cost reductions were
`deemed possible. Authorities in the majority of
`European countries have intensified their price
`control efforts to secure price cuts for pharma-
`
`7
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`

`MEDA | Trends and specialty pharma
`
`ceuticals, which has led to a number of drugs
`losing their former reimbursement status in re-
`cent years.
`Influence over the choice of medications has
`also gradually shifted from prescribing doc-
`tors to various coordinating committees and
`purchasing organizations. Product compari-
`sons of medical properties and price have be-
`come increasingly common, which has altered
`the playing field for the pharmaceutical in-
`dustry. Overall price control mainly occurs th-
`rough legislation and regulation of reimburse-
`ment of prescription drugs, and by instructing
`prescribers to always select the least expensive
`equivalent product. Regulations also vary from
`country to country, including within the EU.
`Furthermore, requirements regarding increased
`competition by minimizing obstacles for new
`players complicates matters when balanced
`against the imperative for safe and secure drug
`use for consumers.
`
`GENERICIS dISPLAY INCREASINGLY STRONG GROwTh
`Generic drugs are copies of original drugs who-
`se patents have expired and thus can be produ-
`ced by several manufacturers. The market for
`generics has seen strong growth over the past
`five years, chiefly in the growth markets, where
`they are being increasingly used as alternatives
`to the more expensive original drugs.
`The US is the single largest market for gene-
`rics. The market in Europe is fragmented. In se-
`veral Eastern European countries, generic drugs
`account for the majority of total prescriptions.
`In some countries, generics make up more than
`70% of market volume.
`In contrast, generic prescriptions remain low
`in several large markets, such as France, Spain,
`and Italy. Sweden, Denmark, Germany, and
`the UK remain in the midrange. But Germany
`and the UK have the greatest sales of generic
`drugs, in terms of value.
`As with big pharma, the objective for the ma-
`jor global generics companies is to strengthen
`
`GLOBAL SALES TRENd FOR SPECIALTY PROdUCTS,
`2011–2016, FORECAST, USd BILLIONS
`
`GLOBAL SALES TRENd FOR GENERICS, 2011–2016,
`FORECAST, USd BILLIONS
`
`596
`
`630
`
`800
`
`700
`
`600
`
`500
`
`400
`
`300
`
`200
`
`100
`
`415
`
`242
`
`500
`
`400
`
`300
`
`200
`
`100
`
`0
`
`2011
`Source: IMS Institute for Healthcare Informatics.
`
`2016
`
`0
`
`2011
`Source: IMS Institute for Healthcare Informatics.
`
`2016
`
`8
`
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`

`

`Trends and specialty pharma | 2012 Annual report
`
`competitiveness through mergers and acquisi-
`tions. Operating on a large scale primarily crea-
`tes opportunities for more efficient marketing,
`resulting in lower costs.
`
`INCREASE FOR OTC PROdUCTS
`The trend towards preventive health care has
`gradually strengthened in recent years. Over
`the past few years, patient awareness has in-
`creased considerably regarding various illnes-
`ses and drugs, and which OTC products can be
`used for different needs. The internet is a key
`channel for information in this area. This me-
`ans that many patients are extremely active in
`searching for information themselves. OTC pro-
`ducts have become a key complement to pres-
`cribed drugs, as they often save patients time
`and money and at the same time lighten the
`burden on health care services.
`The nature of the self-care market differs
`from the prescription drugs market in several
`ways. Without patent protection it is therefore
`important for the individual OTC products to
`build strong brands and build up a high level
`of customer loyalty. The channel for reaching
`customers is various kinds of media, including
`television, radio, printed media, and the in-
`ternet, and increasingly also social media. The
`competition situation is therefore on the whole
`similar to that for general consumer goods.
`Growth is currently higher for OTC products
`than for prescription drugs. Here, too, there
`are major differences from one country to the
`next. In growth markets such as Brazil, Rus-
`sia, China, and India, the annual growth rate
`for OTC products is 10% or more, compared
`to 3–4% in North America. Growth is lower in
`
`Japan and some European countries (including
`the UK, Germany, France, and Italy).
`
`SPECIALTY PHARMA
`Big pharma’s focus on developing new “block
`busters”, i.e. best-selling drugs within the most
`profitable therapy areas, has created a market
`niche for a new type of pharmaceutical com-
`pany: specialty pharma companies. When the
`major multinational pharmaceutical companies
`give lower priority to certain projects, despite
`the products being medically valuable, speci-
`alty pharma companies can carry out product
`acquisitions for everything from smaller niche
`products, to potentially major products. Exper-
`tise and resources for efficient marketing are a
`key ingredient of specialty pharma companies’
`business concepts. Meanwhile, the companies
`are often flexible in relation to their operations,
`which is essential in being able to satisfy the
`needs of the market with regard to cost effi-
`ciency.
`Specialty pharma companies aim to seek ac-
`quisitions of products in late clinical phases or
`close to regulatory approval. This avoids the
`risks associated with early research. New pro-
`ducts are also supplied by the acquisition of
`medically valuable drugs for which the sales
`trend may have stagnated. It is in this area that
`specialty pharma companies have the opportu-
`nity to achieve satisfactory volumes through in-
`creased prioritization of marketing and concen-
`tration on local markets.
`The product portfolios of specialty pharma
`companies can encompass everything from
`pure generics to enhanced specialist products,
`which target small yet clearly defined groups.
`
`9
`
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`
`

`

`MEDA | Trends and specialty pharma
`
`In addition, interest in the OTC market has
`grown in recent years as it is displaying high
`growth and is less vulnerable to patent expira-
`tions and price pressure.
`Specialty pharma companies are often att-
`ractive partners for pharmaceutical, research,
`development, and biotech companies that lack
`marketing organizations of their own. They
`have the ideal conditions to increase cost ef-
`ficiency through active partnerships regarding
`both potential global blockbusters and smaller
`niche products, and they can adapt their sales
`and marketing to local markets.
`Broadly speaking, the specialty pharma sec-
`tor falls into three segments:
`
`1. GENERICS
`Large volumes are crucial for successful pro-
`duction, marketing, and sales of generic pro-
`ducts. These companies therefore focus on the
`active ingredients for blockbuster products. In
`some cases, these products can be improved in
`some way to distinguish them from other ver-
`sions.
`
`2. dRUG dELIvERY
`Companies that specialize in drug delivery de-
`velop new methods of getting the medica-
`tion into the body. This may take the form
`of tablets, capsules, injections, sprays, inha-
`lers, or patches. This often involves inventing a
`new administration technique for patent-free
`substances to create a new, improved, and in
`some cases patented product. Development
`costs for this type of product are significantly
`
`lower than for traditional early stage research.
`The drug delivery segment includes companies
`that focus solely on developing new techno-
`logies and companies that choose to combine
`existing technology with commercialization of
`key proprietary products, which can occur in
`collaboration with other companies or entirely
`under their own management.
`
`3. ACqUISITIONS ANd IN-LICENSING
`A third category of specialty pharma compa-
`nies focus their business on building a pro-
`duct portfolio, usually within a limited num-
`ber of therapy areas. This is primarily achieved
`through acquisitions and in-licensing. Restric-
`ting itself to a limited number of therapy areas
`enables the company to compete with much
`larger companies at limited capital investment
`and risk. There is also the possibility of supple-
`menting marketing of specialist products and
`acquired original drugs with in-house product
`development of, say, new pharmaceutical for-
`mulations or new indications; this is known as
`product life-cycle management.
`Meda’s ambition is to be the world’s leading
`specialty pharma company in this category.
`Meda pursues this via acquisitions of compa-
`nies and product rights for both prescription
`(RX) and non-prescription drugs (OTC), long-
`term partnerships, and enhanced growth mar-
`ket presence teamed with late-phase develop-
`ment.
`
`10
`
`Dymista booth at ACAAI 2012 in
`Anaheim, California.
`
`000012
`
`

`

`Omvärldsbeskrivning & specialty pharma | Årsredovisning 2012
`
`11
`
`000013
`
`

`

`MEDA | Strategy and business development
`
`Meda’s business concept is
`To offer cost-effective, medically
`well-motivated products.
`The goal
`To enhance its position and
`become the world-leading
`specialty pharma company.
`The means
`An active acquisition strategy and
`organic growth through market-
`adapted product development.
`
`12
`
`Strategy and business development
`
`Over the past decade, Meda has developed into a leading
`international specialty pharma company with its own sa-
`les organizations in more than 55 countries. In other mar-
`kets around the world, its products are marketed and sold
`via agents/distributors and other pharmaceutical companies.
`Meda’s pharmaceuticals are sold in more than 120 countries
`and Meda is about the 50th largest pharmaceutical company
`in the world by sales.
`The long-term strategy for growth and expansion is based
`on a combination of supply of own products and increased
`market focus. This has been achieved through acquisitions of
`companies and exclusive product rights, and through long-
`term collaborations with other pharmaceutical companies. At
`the same time, company capabilities within sales, marketing,
`and business development have continued to expand. Meda
`has teamed a cost-effective approach with a focus on medi-
`cal quality to meet customer needs.
`Company expansion has been oriented mainly towards
`identifying potential acquisitions, both companies and indivi-
`dual products, and opportunities to in-license drugs. Several
`strategic acquisitions were completed in the period 2005 to
`2008, including German pharmaceutical group Viatris, 3M’s
`European pharma division, US specialty pharma company
`MedPointe, and Valeant’s European pharmaceutical division.
`These acquisitions have transformed Meda from a Swedish
`to an international specialty pharma company with proprie-
`tary US and European sales organizations and access to a glo-
`bal pipeline.
`A portfolio comprising several successful OTC products
`was obtained through the acquisition of US specialty pharma
`company Alaven in 2010, and the incorporation of Nordic
`OTC company Antula in 2011. Meanwhile the expansion of
`the sales and marketing organizations in a number of growth
`markets has been intensified.
`Meda enjoys a strong position within the product are-
`as Specialty Products, OTC, and Branded Generics, and the
`company’s strategy for continued expansion remains highly
`
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`Strategy and business development | 2012 Annual report
`
`relevant for the future. Acquired companies are
`immediately integrated into Meda’s Group or-
`ganization, and mature and specialist product
`acquisitions are transferred directly to the cor-
`porate product portfolio.
`Sales and marketing are top priority. Meda
`strives to maintain a non-hierarchical organi-
`zation with short decision paths and efficient
`work processes, which when melded with the
`resources of a large company create clear com-
`petitive advantages that ensure continual rea-
`lization of key business opportunities. Product
`acquisitions are preceded by meticulous ana-
`lysis based on several criteria, including brand
`strength, the product’s phase in the product
`life-cycle, patent protection, profitability, com-
`plexity of product formulations, and further po-
`tential for product development.
`Meda’s own drug development aims to en-
`hance future organic growth by building up a
`strong pipeline. Meda refrains from risky, ca-
`pital-intensive early research, in line with the
`company’s strategy. The focus is instead on de-
`velopment in the late clinical phase.
`Numerous important advances in drug deve-
`lopment were made in 2012. These advances
`relate mainly to:
`
`• Dymista, which was approved by the US
`Food and Drug Administration (FDA) in May.
`Dymista is a new patented product intended
`for patients with allergic rhinitis. Dymista’s
`efficacy and safety were documented in se-
`veral studies with more than 4,600 patients,
`including a long-term safety study of more
`than 600 patients. Dymista has consistently
`displayed faster and more complete symptom
`
`relief than standard treatment in the US (flu-
`ticasone propionate). Dymista was approved
`in Europe in January 2013 and registration is
`underway in other markets.
`
`• Edluar, which was approved in Europe in
`June, for treatment of insomnia. Edluar was
`approved in the US in 2009 and the drug
`was launched in Canada at the start of 2012,
`under the name Sublinox. Edluar/Sublinox
`uses a unique and patented sublingual tablet
`formula that is fast-acting and effective.
`Registration is underway on markets outside
`North America and Europe.
`
`• Zyclara (imiquimod 3.75% cream) for actinic
`keratosis, which was granted marketing
`approval by the European Commission in
`August. Actinic keratosis can develop into
`squamous cell carcinoma, a malignant tumor,
`which is why early treatment is important.
`Zyclara is the first clinically proven treatment
`option that can detect and eliminate sub-
`clinical and clinical actinic keratosis lesions on
`large areas of skin.
`
`SALES BY ThERAPY AREA
`Local products 26%
`
`Respiratory 15%
`
`CNS 8%
`
`Pain and
`inflammation 11%
`
`Dermatology 24%
`
`Cardiology 16%
`
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`
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`

`MEDA | Meda in brief
`
`Meda in brief
`
`Meda has a broad geographic coverage with pharmaceutical sales in more than 120 countries.
`
`OPERATIONS
`Meda is an international specialty pharma
`company with its own sales organizations in
`over 55 countries and operations expanding in
`growth markets.
`Meda is the 50th largest pharmaceutical
`company in the world. At the end of 2012,
`Meda had 2,900 (2,623) employees, about
`1,800 of whom work in sales and marketing.
`Sales and marketing activities are carried out
`
`via agents in countries where Meda has no re-
`presentation. Meda’s pharmaceuticals are sold
`in more than 120 countries. Meda AB is the
`Group’s parent company and its head office is
`in Solna, Sweden.
`Meda is listed under Large Cap on the
`NASDAQ OMX Nordic Exchange in Stockholm,
`Sweden.
`
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`
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`Meda in brief | 2012 Annual report
`
`EMPLOYEES BY COUNTRY
`
`SALES BY COUNTRY
`
`Other 21%
`
`Germany 22%
`
`US 14%
`
`Other 34%
`
`Sweden 10%
`
`Germany 10%
`
`US 20%
`
`Turkey 2%
`Netherlands 2%
`Belgium 3%
`Spain 4%
`
`UK 6%
`
`Italy 6%
`
`France 9%
`
`UK 3%
`China 3%
`Spain 3%
`
`Italy 3%
`
`Turkey 4%
`
`Sweden 4%
`
`Russia 4% France 13%
`
`SALES TRENd
`
`SEK million
`14,000
`
`12,000
`
`10,000
`
`8,000
`
`6,000
`
`4,000
`
`2,000
`
`0
`
`2008
`
`2009
`
`2010
`
`2011
`
`2012
`
`Sales in 2012 amounted to SEK 13 billion and have a broad geographical distribution.
`
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`
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`
`

`

`SALES BY ThERAPY AREA
`
`Local products 26%
`
`Respiratory 15%
`
`Cardiology 16%
`
`CNS 8%
`
`Pain and
`inflammation 11%
`
`Dermatology 24%
`
`SALES BY PROdUCT AREA
`
`Branded
`Generics 11%
`
`Other 4%
`
`OTC 23%
`
`Specialty
`Products 62%
`
`MEDA | Meda in brief
`
`PRODUCTS AND KEY THERAPY AREAS
`Meda’s product portfolio is divided into
`three main areas: Specialty Products, OTC (non-
`prescription products), and Branded Generics.
`All areas have in common the fact that Meda
`has chosen to focus on niche products that
`hold a strong position in their respective thera-
`py areas, locally or globally.
`Meda’s therapy areas are: respiratory, derma-
`tology, cardiology, pain and inflammation, and
`central nervous system (CNS). These groups
`make up about 74% of total sales. Local pro-
`ducts, which have strong brands and mar-
`ket positions, constitute another major part of
`Meda’s product portfolio. Meda remains firmly
`focused on specialty drugs for small patient
`groups. Specialty drugs often have lower sales
`overheads, because marketing can be directed
`towards a homogeneous target group.
`As a general rule, the market for specialty
`drugs is less subject to competition and price
`sensitivity. In contrast, blockbuster products de-
`mand massive marketing efforts in a market
`that is often highly competitive.
`Over-the-counter products (OTC) have gai-
`ned significance for Meda in recent years.
`Growth has occurred both organically and via
`acquisitions.
`
`wELL-dIvERSIFIEd PROdUCT PORTFOLIO
`Meda’s product portfolio is well-diversified.
`The company’s presence is focused on a num-
`ber of strategically selected therapy areas with
`a balanced range of drugs within each thera-
`py area. The fact that our product portfolio is
`well-balanced means that the company is not
`overly dependent on any single product. The
`largest product, Betadine, accounts for six per-
`cent of total sales and the ten largest products
`together constitute just over 30% of Meda’s
`total sales.
`
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`Meda in brief | 2012 Annual report
`
`AdMINISTRATION
`The administration function consists mainly of
`Meda’s finance department and Group Servi-
`ces. Broadly speaking, the tasks of the finance
`department are divided into three areas: per-
`formance (budgeting, planning, and follow-
`up), compliance (accounting, reporting, and
`taxes), and risk management (currency and
`interest rate risks and insurance). The Group
`Services department comprises Meda’s legal
`functions, brand management, and HR admi-
`nistration.
`
`dISTRIBUTION OF EMPLOYEES BY FUNCTION
`
`Administration 9%
`
`Development
`12%
`
`Manufacturing
`17%
`